Amazing Tips For Paying Off Credit Card Debt
If you have credit card debt, there are a few different options for paying it off.
If your balance is spread over several cards, consider transferring all your credit card debt onto one card. This can be your current card with the lowest rate, or if you have a good credit rating you could try and apply for a new card with 0% balance transfer rating, or one that advertises a low APR for the life of the card. Ensure that you apply for a large enough limit to cover your other cards, and bear in mind sometimes you can get cashback offers so take advantage of this and use it for an extra payment towards the credit card debt.
Credit Card Debt = Debt Consolidation Loan?
In a similar light, you could apply for a debt consolidation loan. Debt consolidation loans often have lower interest rates than credit cards but are fixed-period and therefore do not have the flexibility of credit cards. Ensure that if you take out a loan for consolidation purposes that you do not simply run up the debt on the cards again, and be especially careful secured loans on your home – these loans, often referred to as homeowner loans, are easier to get and usually have a low APR but these usually involve you giving your house deeds to the creditor – if you default you will lose your house.
Both of the above solutions assume you can get more credit, and additional secured loans or credit cards will not have an impact on your credit rating as long as you do not default. If you have a poor credit rating or a high level of credit card debt with regards to income, you may not get a new credit card or a consolidation loan – after all, the lender cannot guarantee that you will be using their money for that purpose. If this is the case, it’s time to look at other options – sorting the debt out without further borrowing.
Is Your Credit Card Debt Getting You Down?
There are many companies that will set up debt management plans for you, contacting your creditors to get your payments down. You pay a fixed sum to the management company and they distribute it amongst your creditors appropriately. Some companies charge a monthly fee for this but there are a few who do not. You can also set up this kind of debt management plan yourself – work out your incomings and outgoings and from this make payments offers to the credit card companies. It will have an impact on your credit file but not as much as insolvency will, and should you get a second job or a pay rise you can always offer more.
Lastly there is the possibility of extreme action such as Individual Voluntary Arrangements or bankruptcy. These are classed as “Insolvency” and will have a major impact on your credit rating. This kind of arrangement is usually done via a specialist company or a solicitor and has to be approved by a court, and should only be used in extreme circumstances.
No credit card debt problem is so bad that it cannot be solved in some way. Hopefully one of the above solutions will be appropriate for your credit card debt problem and you can look forward to the day you have your credit card debt paid off.